Sales at Compagnie Financière Richemont SA for the first quarter increased by 12 percent at actual exchange and 9 percent at constant exchange to 3,740 million euros (4,202 million dollars) compared to the prior year period. The company said in a statement that excluding online distributors, sales rose by 6 percent at actual exchange and by 3 percent at constant exchange rates.
The company added that During the quarter under review, sales expanded in Asia Pacific and Japan, showed modest growth in the Americas, and contracted in Europe and the Middle East and Africa.
Review of Richemont’s results across core geographies
In Europe, sales were 1 percent lower compared to the prior year period as good momentum at the jewellery maisons was more than offset by a slower performance in the other business areas, with contrasted performance among markets.
In Asia Pacific, the 9 percent increase in sales reflected double digit sales growth in its key markets, with the exception of Hong Kong. The company added that growth was led by mainland China, where strong sales were supported by lower VAT and custom duty rates; sales in Hong Kong retreated, additionally impacted by the relative strength of the Hong Kong dollar and the recent street protests.
The company further said that sales in the Americas rose by 1 percent as growth at the jewellery maisons and the other business area outweighed lower sales at the specialist watchmakers. In Japan, the 6 percent progression in sales was driven by good domestic and tourist spending, and the full year impact of recently opened directly operated boutiques. Unfavourable currency movements and the severance of selected wholesale relationships weighed on sales in the Middle East and Africa, which decreased by 12 percent over the period.
Richemont's retail channel posts 6 percent rise in Q1
Following strong double-digit growth in the prior year period, the retail channel registered a 6 percent increase in sales, driven by the jewellery maisons and also specialist watchmakers. However, the company said, ongoing cautious watch inventory management and distribution optimisation initiatives continued to negatively impact the wholesale channel, which posted a 2 percent decrease in sales. The online retail channel delivered double-digit increase in sales.
The 7 percent sales progression at Cartier and Van Cleef & Arpels was supported by jewellery and watches. Sales grew in all regions with the exception of the Middle East and Africa. Specialist watchmakers’ sales were 2 percent lower than in the prior year period. The 3% sales reduction in the group’s other businesses included the impact of the disposal of Lancel. Excluding this impact, Richemont said, sales decreased by 1 percent as the strong performance of Peter Millar contrasted with that of the other maisons.
Picture credit:Olaf Tamm Hamburg Germany for Richemont